Note 2 - Inventories

3 Months Ended

Jun. 30, 2015

2.	INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method. Inventories consist of the following:

	June 30, 201 5		March 31, 201 5
	(in thousands)
Raw materials	$	309	$	931
Work in process		3,245		1,509
Finished goods (1)		2,113		2,895
Supplies		172		343
	$	5,839	$	5,678

(1)

Net of reserve for obsolescence of $4,000 and $4,000, at June 30, 2015 and March 31, 2015, respectively.

The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, as an expense in the period incurred. Start-up costs for our extraction facility of $170,000 and non-inventoriable fixed costs related to astaxanthin production of $44,000 were charged to cost of sales for the quarter ended June 30, 2015. Abnormal production costs of $64,000 and non-inventoriable fixed costs of $17,000 were charged to cost of sales for the quarter ended June 30, 2014.